Britain's police watchdog today reversed its decision to allow police to investigate the death of Ian Tomlinson at the G20 protests in London last week after watching Guardian video footage of a baton-wielding officer attacking him.

The Independent Police Complaints Commission will appoint its own investigators to conduct a full criminal inquiry into whether Tomlinson was assaulted by police and whether that attack contributed to his death.

The IPCC has ordered a second postmortem examination, which aims to provide medical evidence as to what caused the death of the newspaper seller. The first attributed his death to natural causes.

Tonight, Tomlinson's family released a statement through their lawyer which said that they wanted "to thank the media for bringing crucial evidence about Ian's death to light".

The family said they were "grateful to all the witnesses who have come forward and asked for anyone else who has information to contact Tuckers Solicitors and the IPCC".

The family's solicitor, Jules Carey, said her clients now requested "that their privacy be respected while they come to terms with the tragic loss of Ian".

Earlier, the IPCC deputy chair, Deborah Glass, said the investigation was focused on identifying the officers in the footage. "Several have already come forward and all efforts are being made to trace those who haven't," she said in a statement.

Earlier this week the IPCC appointed the City of London force to investigate the incident, despite its officers having been involved in policing the protest.

Video obtained by the Guardian of the minutes before Tomlinson's death clearly shows City of London officers standing near the officer who attacked the newspaper seller. That officer is believed to be from the Metropolitan force.

The video footage shows Tomlinson walking past police with his hands in his pockets, then being knocked to the ground by a police officer in riot gear as officers from the City of London force look on, minutes before he suffered a fatal heart attack.

Furthermore, new footage obtained by Channel 4 News also appears to show from a different angle a police officer hitting out at Tomlinson with a truncheon.

In a statement last Friday, the head of the City of London force declared the policing operation a success, further calling into doubt the force's suitability to conduct the investigation.

Mike Bowron, the City of London police commissioner, said: "The success of the operation is shown in the excellent feedback we have received from across the Square Mile."

There had been intense pressure on the IPCC to use its powers to conduct an independent investigation. Brian Paddick, a former deputy assistant commissioner at the Metropolitan police, demanded that police be removed from the case and said any officer who struck the innocent passerby could face a manslaughter charge.

He said the officers from the City of London force would be key witnesses in the investigation.

Paddick told the Guardian: "How can the City of London do the investigation independently? I'm sorry but there are three City of London officers in that video, how can they do the investigation? It certainly needs to be a full-blown criminal investigation … [into] whether there is a provable link between the death and assault, because an assault is a criminal offence. Police are allowed to use force, provided it is justified."

Paddick refused to comment on whether the police actions in the video were justified, but said the officer seen striking Tomlinson could potentially face a charge of manslaughter, for which the maximum penalty is life imprisonment. "If it is held that there is a link between the violence he [the officer] was inflicting and the heart attack [suffered by Tomlinson], that then is an assault, resulting in death, albeit unintended. If a court held it is an assault, it is an unlawful action resulting in manslaughter," he said.

Reaction to the publication of the video came from the police and from across the political spectrum. The Metropolitan police commissioner, Sir Paul Stephenson, said today the video images "raise obvious concerns" and should be investigated fully.

Stephenson said the Met would co-operate with the investigation. "It is absolutely right and proper that there is a full investigation into this matter, which the Met will fully support," he said.

The home secretary, Jacqui Smith, defended the IPPC's role in the inquiry, saying there would be a criminal case if necessary: "What's extremely important from the events last week, from the sad death of Ian Tomlinson, is that there is an inquiry through the IPCC," she said. "If it identifies the need for a criminal investigation then that also needs to be pursued."

Boris Johnson, the London mayor, is pressing for a "speedy and thorough" inquiry by the police complaints body, his chief spokesman said. He said the mayor had watched the footage today and had been seriously concerned by what he saw.

Many opposition and backbench Labour MPs had called for a fully independent inquiry into the attack.